‘Global markets face the prospect of months of elevated volatility as Italy’s political crisis threatens the stability of the eurozone, and the US signals it is willing to revive its trade dispute with China. In Europe, yields on Italian, Spanish, Portuguese and Greek bonds have surged, raising borrowing costs, and widening the gap between German bunds to the most in almost five years. Losses in bank stocks pushed the S&P/ASX 200 Index to 5983.60, down 0.5 per cent, and Asian equity markets fell more than 1 per cent in Hong Kong, Japan, Shanghai and Korea. The 1.6 per cent drop by the Dow Jones Industrial Average on Tuesday and 2.7 per cent drop for Milan’s bourse were overshadowed by the rout in the bond market, where the 10-year Italian bond yield rose to 2.99 per cent and the two-year to 2012 levels. The yield on the US 10-year note tumbled to 2.84 per cent.’